Northwest Arkansas Democrat-Gazette
Cannabis applicant put meet-up on tape
Secret video shows topic was failed license
An applicant for one of Arkansas’ first medical-marijuana growing licenses secretly videotaped a meeting earlier this year with a member of the panel given the task of issuing the lucrative permits.
The recording, obtained this week by the Arkansas Democrat-Gazette, reveals more about an attempted-bribery allegation that has loomed over the rollout of the state’s medical-marijuana program since the allegation became public in a June.
Dr. Carlos Roman, the Arkansas Medical Marijuana Commission member, and Ken Shollmier, owner of Natural State Agronomics, accused each other of wrongdoing in interviews on Friday, but they both agreed that the March meeting between them was set up for one main goal: to capture Roman on tape asking for a bribe.
Shollmier and Roman, however, both said that no money ever changed hands.
Natural State Agronomics, which didn’t score well
enough to receive one of the five cultivation licenses, was rated poorly by four commission members, but it was the second-highest of Roman’s scores, raising eyebrows when the grades were revealed in February.
The bulk of the videotaped meeting was a conversation between Roman and Shollmier about why Roman thought the other commissioners graded Natural State Agronomics’ application poorly.
“I appreciate everything,” Shollmier told Roman in the video. “If I owe you something, let me know.”
“No sir, not at all,” Roman said. “A kind word in your favor (sic) if you hear my name mentioned. You see [Senate President Pro Tempore Jonathan] Dismang or something, say, ‘Yeah, reappoint Dr. Roman to that commission.’ You see the governor, just say, ‘I think Dr. Roman is a swell guy. He ought to stay on that commission.’ But that’s all. That’s all.”
Reached about the video on Friday, Roman said he was unaware he was being recorded during the meeting, and he had felt pressured into meeting Shollmier twice — once before scoring applications and once after. The meeting after the scoring process was the one recorded.
Dr. Ralph Teed, a Newport dentist, helped arrange the meetings. Teed, who could not be reached for comment Friday, was at the March meeting, Roman and Shollmier confirmed.
Roman said he contacted the FBI after Shollmier and his associates tried to use secretly recorded footage to extort him. Roman said he voluntarily turned over his bank, tax and phone records to the FBI.
“I should’ve gone to the FBI earlier,” Roman said. “I’ve never experienced anything
like this.”
An FBI spokesman declined to comment. No information about the investigation has been released since it was disclosed in a June letter from Arkansas Attorney General Leslie Rutledge to the Arkansas Supreme Court, which at the time was considering a legal challenge to the commission’s scoring process.
Rutledge wrote in the letter, which she tried to keep secret, that Roman had reported being offered a bribe by Natural State Agronomics to authorities.
Shollmier on Friday denied ever offering Roman a bribe. He initially told a reporter who asked about the videotaped meeting that he didn’t “understand what you’re talking about,” but then he briefly discussed the video after the reporter described it.
He said Roman requested the meeting. Shollmier said he hid the camera to try to capture Roman on video asking for a bribe.
“He had already told people I had tried to bribe him, which is a lie,” Shollmier said, adding that Roman had asked him for a loan. (Roman denied ever asking for a loan.)
The video raises additional questions about the process the Arkansas Medical Marijuana Commission used to evaluate the cultivation license applications. The cultivation licenses were awarded in July and the next step will be to award dispensary licenses. Officials estimate medical marijuana will be available to Arkansans in 2019. Voters approved medical marijuana in a constitutional amendment in the 2016 election.
The process has been marred by scoring irregularities, alleged conflicts of interest, plagiarism, court challenges and claims that regulators failed to verify that permit-holders have complied with key requirements.
The video shows, for example, that commissioners could identify who owned the companies behind certain applications during the grading process, despite efforts to redact information from the documents. Alcoholic Beverage Control Division staff members stripped the applications of owners’ information to try to prevent any bias in the grading process.
However, as seen in the meeting on the videotape, Roman implied to Shollmier several times that he knew Natural State Agronomics’ application was his during scoring, saying he went the “extra mile” while grading the proposal. Still at several points, Roman stressed that he didn’t do Shollmier any favors.
On Friday, Roman said that much of what he said in the video is false, and that he was simply trying to appease Shollmier
because he was scared.
“They tried to entrap me with that video, so they could leverage this over me to get me to do other things.” Roman said Friday.
Roman said that he knew Natural State Agronomics’ application was Shollmier’s when he was grading it, and he gave the company a high score because he was “under duress.” But the commissioner also said he was impressed by the company’s proposal to partner with an Israeli medical research group.
Roman, in the video, also gives Shollmier a copy of Natural State Medicinals Cultivation’s application. The company was the highest-ranked one to apply for a growing permit. Roman told Shollmier that he brought the top application, so Shollmier could use it as a template for his own application if additional growing permits became available.
“Yeah, I’ll let you have it,” Roman said. “You better not tell where you got it.”
In the video, Roman appears to point to diagrams and renderings that were redacted in the portions of the applications released to the public. Those redactions were made because the sections were considered proprietary information exempt from disclosure under the Arkansas Freedom of Information Act. The sections would not have been redacted in the applications provided to the commissioners for grading.
Roman said Friday that the application he gave Shollmier was the same version released to the public.
If an unredacted version was shared, Scott Hardin, a spokesman for the Arkansas Department of Finance and Administration, which provides administrative support to the commission, said it wouldn’t violate any commission rule, but it would be “very concerning,” because the agency went to great lengths to protect sensitive information in each application.
Hardin also said there’s no rule that would forbid a medical-marijuana commissioner from meeting with an applicant.
Roman said Shollmier wasn’t the only applicant he met with, saying there were about five other groups he couldn’t name.
“I just wanted to learn more about medical marijuana and the industry,” Roman said. “We’re all new to this.”
Three of the other commission members were criticized in the video. Shollmier said “the black lady,” the commission chairman, Dr. Ronda Henry-Tillman, was the one causing problems in the scoring process.
Shollmier also said that several of the five winning companies only included black owners in their applications to earn bonus points. Applicants could earn additional points on their applications for several factors, including minority ownership, locating in an economically depressed county and community service.
“The blacks won’t be in there before it’s over with,”
Shollmier said. “They won’t be. They’ll be bought out. That’s just the way it works.”
Shollmier also implied that several of the commission members took money in exchange for boosting scores.
Besides Roman, Stephen Carroll was the only commission member to respond to comment requests on Friday.
“Throughout the entire process, no one ever offered me, nor did I solicit anything in exchange for preferential treatment in the scoring of medical marijuana cultivation center applications,” Carroll said. “In fact, I suggested that the cultivation center applications be graded by an independent third party. After the scandal that ensued following the initial awarding of cultivation licenses, I recommended [to the commission] that we again consider hiring independent graders for the dispensary applications to ensure the integrity of the process. That motion passed 3-2. Any suggestion that I was not completely transparent and objective in the process is ludicrous.”
The commission is next scheduled to meet on Tuesday to discuss the dispensary application with Public Consulting Group, the company selected to grade the about 200 applications for 32 dispensary licenses. The commission elected to hire a consultant to grade dispensaries after the controversies that followed the growing-license process.
Shollmier is a Little Rock businessman and real estate developer. He’s also a member of the Arkansas Economic Development Council — the 16-member body appointed by the governor. He’s also a frequent donor to the University of Arkansas, Fayetteville, which has named a lecture hall and plaza after Shollmier and his wife, Linda.
At the end of the March videotaped meeting, Shollmier said he’d praise Roman to Gov. Asa Hutchinson.
Hutchinson said in a Friday statement that hasn’t occurred.
“I have not reviewed the video, but Mr. Shollmier has never approached me to discuss a Medical Marijuana Commissioner,” Hutchinson said through a spokesman. “Dr. Roman is not my appointee, and I have not spoken to him about any medical marijuana issues. The Medical Marijuana Commission is an independent body. Upon hearing substantive allegations concerning Dr. Roman, I coordinated with the Attorney General and notified law enforcement. This is reflected in the Attorney General’s letter of June 5, 2018 to the Arkansas Supreme Court.”
At the start of the video, Shollmier and one of his associates can be seen positioning the camera in a hidden spot near a fake plant. As the associate packs up to leave, he makes plans to retrieve the camera later.
“Just in case he’s not with us, we’ve got something (inaudible) if he wants to if he was to say something not true you’ll be able to hold his feet to the fire,” the man said.